FNB’s exercise in highwaymannery
The Post-Gazette reports that First National Bank could be in line for another $4 million in public subsidies to help build its new 26-story skyscraper on the site of the former Pittsburgh Civic Arena.
That would bring to $10 million the public subsidies for the banking giant. It had requested $15 million. It was awarded $6 million late last year. The money comes from the state Redevelopment Assistance Capital Program.
The P-G says news of the latest grant – which sounds every bit the done deal, given there’s a signed “offer letter” – came in a statement from Gov. Tom Wolf, praising the project as a “critical anchor to a major redevelopment site in the city of Pittsburgh.”
Continued the governor:
“This development will provide more than just a safe, state-of-the-art working space for thousands of employees in Western Pennsylvania, it will benefit the surrounding community and actively engage minority and women-owned businesses in the area,” he said in a statement.
But since when is it the taxpayers’ responsibility to help provide such workspace to the employees of this banking giant and/or any private concern that also will occupy the $220 million-plus structure?
Trotted out again, just for good measure, are the rationalizing words of FNB spokesman Jennifer Reel, who defends the public subsidy as “necessary to continue FNB’s investment in the project in a post-COVID economic environment”:
“We believe this is a priority project for the city and region because it creates several thousand construction and permanent jobs, generates millions in tax revenue and helps restart our economy at a critical moment,” she said.
So, apparently, the project would not have done this without a $10 million dollar bolus from taxpayers? Would it not have been built without taxpayer dollars? If not, it must not be a very prudent project if FNB had to offload risk onto taxpayers, right?
Taxpayers have no business — not now, not ever — covering capital costs that that business owners should bear on their own. Yet we see this time and time again: taxpayer played for suckers.
And let’s not forget the words of Vincent J. Delie, Jr., FNB’s chairman, president and CEO, reacting to the banking behemoth’s third-quarter 2020 results this past October:
“In this challenging economic environment prompted by the global pandemic, FNB continues to produce positive results built on employee protection and assistance, operational response and preparedness, continued customer and community support and stringent risk management.
“Our performance is directly attributable to our resilient business model, which is based upon the deployment of technology and expansion into attractive new markets.”
And, going forward, a $10 million taxpayer sweetener, right?
What continues to be particularly galling about this latest dive by a Pittsburgh banking giant into taxpayer pockets (don’t forget taxpayers’ $48 “gift” to PNC in 2007) is that it will only add to the glut of premium office space in downtown Pittsburgh.
And it was a glut that predated the coronavirus pandemic. Now, the pandemic very well could permanently alter the need for such space as companies find significant cost savings and employee efficiencies working remotely.
Advocates for these continuing spates of corporate wealthfare invariably tout all the marvelous benefits their projects will deliver to the public kitty.
But guess what? Those supposed benefits would be greater in an amount equal to the subsidy had taxpayer pockets not been turned out in the first place.
All that said, public subsidies for giant corporations are bad enough. But they leave a particularly sour taste when it’s a big, big bank raiding the public vault – and with public officials’ blessings, no less.
What, they can’t get a loan like the rest of us?
This buncombe, of course, is the furthest thing from sound public policy. State-sanctioned highwaymannery always is.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (email@example.com).